OneLBriefs

A.L.A. Schechter Poultry Corp. v. U.S.

SCOTUS - 1935

Facts:

The Live Poultry Code was an act of Congress aimed at the poultry business. It dealt with sales of coops of chickens as well as labor issues in the poultry business.

D corporation was a poultry middleman in NYC. They bought their poultry from companies outside of NY, slaughtered the chickens, then sold them to butchers and stores in NYC.

D did not sell chicken in interstate commerce.

Procedural History:

SCOTUS held that the Live Poultry Code was unconstitutional.

Issues:

Were D's actions in interstate commerce under a stream of commerce theory?

How far can the gov't go in regulating intrastate transactions that affect interstate commerce?

Holding/Rule:

D's actions were not in interstate commerce under a stream of commerce theory because the goods had come to rest in the state when D handled them and did not leave the state afterwards.

The gov't can only regulate intrastate transactions that have a direct effect on interstate commerce.

Reasoning:

The chicken when handled by D was used in local disposition; the interstate transactions in relation to that poultry had ended.

Therefore, there is no merit to the argument that the poultry was in a current or flow of interstate commerce since the flow had ceased when the poultry reached D.

Direct effects of intrastate commerce on interstate commerce are visible in the railroad cases.

When the effect is merely indirect, such transactions remain within the domain of state power.

If the Commerce Clause were construed to reach all enterprises and transactions which could be said to have an indirect on interstate commerce, federal authority would embrace practically all the activities of the people. There would be virtually no limit to federal power.